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Why your recruitment startup can't afford to ignore outsourcing services
Starting a recruitment agency is hard.
There's getting funds together, creating a business plan, building a website, finding staff ... oh, and have you even thought of a name yet?
All this and you've got to find a way to compete at a time when the number of recruitment agency startups is rising.
Sometimes it can feel like you're spinning too many plates, but thanks to support and outsource services, startup agencies have access to some very helpful hands.
The question is, does your agency really need a startup support partner?
What does a recruitment agency startup support service do?
If you've never set up a business before, or are starting a new career in recruitment, then launching your own recruitment agency might be a challenge.
I mean, do you even know where to begin when setting up a recruitment agency?
This is where a startup support service can help.
Startup specialists help recruitment entrepreneurs launch and grow their own staffing business. They have become increasingly popular with recruiters who are looking to break out on their own and take charge of their career.
What recruitment startup support services offer
From launch to sustained back office support (and everything in between), startup services provide outsourced assistance to aspiring agency owners.
Some of the solutions they may offer include:
- Business planning.
- Payroll processing.
- Credit control.
- Website buiding.
- Office setup.
- Legal support.
Depending on which company you go with, they may charge a one-off fee, or may want a percentage of your monthly revenue until the costs are recouped.
The key point is that you still retain 100% ownership of your agency.
Some companies will specialise in a particular function, such as marketing or accounting, while others will support you every step of the way. Make sure you choose one which is right for you!
The benefits of outsourcing as a startup
As a startup (or even an established recruitment firm), outsourcing certain business functions can be a huge help.
Laura Mould, Managing Director at SSG, believes that the biggest benefit of startup outsourcing is that it allows recruiters to concentrate on recruiting.
She said: "The value in using a service such as SSG is immeasurable. It's having a team of experts on hand, that you can call upon anytime - whether that be for marketing materials, advice on expansion and growing the business, technical assistance, professional accounts and back office functions, guidance to ensure compliance and much more."
Basically, if you need access to lots of different skills that you don't possess, startup services are ideal.
Laura went on to say: "...this allows a recruiter to do what they do best - recruiting and making money, without needing to become an expert in a multitude of other disciplines."
This is startup support in a nutshell.
To launch a successful business, you need to learn a lot of skills - and quickly. This can detract from the reason you decided to take the first steps towards starting your own recruitment empire.
So, rather than spreading yourself too thinly (or ineffectively) across multiple functions, why not enlist help to cover those areas?
Reasons you might decide to outsource
Just because you can outsource, doesn't mean that you should.
So what are the circumstances where you might choose to approach a recruitment agency startup support service?
1) You lack key skills
If you've only ever moved between agencies, chances are you've only had to worry about candidate sourcing. This all changes once you launch your own venture though, something that many might feel ill-prepared for. Outsourcing responsibilities to a specialist can prove the best option if you want immediate access to business skills without recruiting.
2) To concentrate on business growth
Recruiters recruit. It's as simple as that. Unfortunately making the transition from recruiter to business owner means that hours spent recruiting can often become limited. Moving some business functions onto an outsource partner gives you some time back and allows you to focus your attentions on recruiting and developing your business.
3) You're running a 'bedroom business'
The beginnings of many successful businesses can be traced back to a home office or spare bedroom. Because of this, it's not really possible to hire an accounts team, or even an accounts person. Outsourcing therefore gives micro-agencies the skills and manpower of a back office support team, without needing the space for one.
But what are the biggest headaches for startup agencies?
When first starting out, there are a lot of things to get your head around.
Premises. Staff. Getting leads.
The majority of people who decide to start a recruitment agency will already have some experience as a recruiter, but have none as a business owner.
You might be the best recruiter in the industry, but do you know how accounting, branding or legal compliance works?
So for a recruiter that's going it alone, what is the biggest challenge?
Our Twitter poll showed that 60% of recruiters thought that branding was the most difficult aspect of launching a business.
This maybe isn't so surprising.
17,271 agencies have launched since 2012. This means that the market is becoming increasingly saturated and finding a way to stand out is more difficult than ever.
Combine this saturated market with the fact that agencies are becoming more digitally aware and more influential on social media, and the pressure to brand effectively becomes huge - something outsourcing can remedy.
Can support services help established agencies?
Just because an agency has survived the early years of development, doesn't mean that they wouldn't benefit from a little extra help.
Obviously, a somewhat established business doesn't need a launch service, but might be looking to outsource areas such as back office or digital marketing.
How can support services help existing agencies?
Support services usually specialise in multiple functions - functions that a recruitment agency may already be outsourcing to multiple businesses or assigning to multiple in-house staff.
By choosing a specialist recruitment agency support partner, agencies can bring all of those responsibilities together (accounting, marketing etc.) and give them to one party.
This can make things easier to manage.
One of the biggest benefits of course, is cost. Even long established agencies still have to be wary of the balance sheet and an outsource partner can help trim away some outgoings.
But where can money be saved?
- Require less office space
- No recruitment fees
- No training fees
- Reduce staff costs
But do you really need to outsource?
If you're not sure whether your agency would really benefit from outsourcing, consider these questions:
1. Are you currently overstretching yourself?
2. Are there not enough hours in the day?
3. Are you lacking some key business skills?
If you've answered yes to any of the above, then outsourcing to a support partner might be something word considering ...
Does a support service guarantee business success?
Can anything guarantee success?
Not really, but outsource support services can certainly boost your chances.
This sentiment is shared by Laura, who said: "It's clear that utilising services such as SSG's contributes significantly to startup success. Four out of five of the businesses we set up are continuing productively in business 12 months from their launch date, and many of the businesses we have set up and supported have gone on to be successfully sold."
In 2016, 4,529 recruitment agencies were launched in the UK. this was a record number. At 91%, the first year survival rate for these startups is high, but less than half (42%) will make it to five years.
By ensuring that you have all the right tools at your disposal, startup support businesses can boost your chances of survival.
Remember though, you can't just contact a service and expect success to happen, so pour yourself a cup of coffee and prepare for some hard work!
To sum up
If you're a recruiter who wants to start your own agency, but worry that you might not have the tools, a startup support business can be a real help.
Perhaps the thought of accounting makes you nervous? Or you wouldn't even know where to start with branding? Whatever challenge you need to overcome, there are services ready to guide you through the early (and latter) stages of launching your own business.
Written by Dan Whitelegg